by Henry Bonner, Sprott:

In his recent market commentary, Chairman of Sprott Global Resource Investments Ltd. Rick Rule warned that the current upswing in commodities and precious metals could be overheating.

Over the last three months, precious metals and natural resources have edged higher. As of March 3rd, gold was up 9% over three months.1 Commodities rose by a similar number, as per the Dow Jones-UBS Commodity Index.2 The AMEX Gold Bugs Index, which tracks gold companies, is up 23% over that period.3

Investors are piling in as a result. Bloomberg reports4: “Hedge funds raised bullish gold wagers to the highest in more than 14 months amid mounting concern that the U.S. economic recovery is weakening.”

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